36C776-24-AP-1200 Consolidation Determination Memorandum.pdf

36C77624R0131

VAAM M807-C Page C-1

CONSOLIDATION DETERMINATION AND FINDINGS

INDEFINITE DELIVERY, INDEFINITE QUANTITY MULTIPLE AWARD TASK ORDER

CONTRACT FOR CONSTRUCTION SERVICES IN VISN 8 - MAINLAND

FINDINGS

I. INTRODUCTION

The Department of Veterans Affairs (VA), Veterans Health Administration (VHA), Program Contracting Activity Central (PCAC) plans to solicit offers for construction services in Veterans Integrated Service Network (VISN) 8 Florida/South Georgia VA Healthcare System (VAHCS) and has conducted market research that demonstrates consolidation of this procurement to be both necessary and justified.

II. BACKGROUND

A. Requirement:

The PCAC is contemplating an award of a construction Multiple Award Task Order Contract (MATOC) for each VISN in the United States, which will involve consolidation (which is defined as: “a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy … requirements of the Federal agency for construction projects to be performed at two or more discrete sites”).

VISN 8 has stations located in Florida, Georgia, Puerto Rico, and the Virgin Islands.

The Puerto Rico and Virgin Island locations are not part of the contiguous United States and have different weather and local conditions. Therefore, PCAC determined that splitting the VISN into two regions with separate MATOCs would be in the best interest of the government and would involve a lesser degree of consolidation that would benefit contractors. It was determined that the Florida and Georgia regions within VISN 8 have a requirement for on-going facilities construction (including new square footage construction), alterations, and repair of buildings, structures and other real property relating to, but not limited to, civil, mechanical, plumbing, structural, electrical, heating, roofing, site work, heating ventilation and air conditioning, for the following VISN 8 VA Medical Centers (VAMCs):

(1) Miami VA Healthcare System, Miami, Florida

(2) Orlando VA Medical Center, Orlando, Florida

(3) Malcom Randall VA Medical Center, North Florida/South Georgia VA

Healthcare System (NF/SGVHS), Gainesville, Florida

(4) Lake City VA Medical Center, NF/SGVHS, Lake City, Florida

(5) West Palm Beach VA Medical Center, West Palm Beach, Florida

(6) James A. Haley Veterans' Hospital, Tampa, Florida

VAAM M807-C Page C-2

(7) James A. Haley Veterans' Primary Care Annex

(8) C.W. Bill Young VA Medical Center, Bay Pines, Florida

(9) Any Community Based Outpatient Clinics located within VISN 8;

(10) Any other VA facility and/or location within the Florida/South Georgia VAHCS.

The intent of this acquisition is to establish a construction Indefinite Delivery, Indefinite Quantity (IDIQ) MATOC to expedite construction procurements in support of VISN 8 Florida/South Georgia VAHCS, all of which are critical to the VA’s mission success.

Construction services in VISN 8 Florida/South Georgia VAHCS are currently being accomplished through Federal Acquisition Regulation (FAR) Part 14 and 15 procedures. The need for on-going construction at multiple VAMC’s would be fulfilled with the award of a consolidated IDIQ MATOC to expedite the solicitation process.

As a measure of ongoing need, VISN 8 Mainland has more than in NRM and Minor construction projects in FY25 that need completed. This annual estimate is expected over the next five years, and with escalation the estimated amount of work supports the maximum contract value. This number represents an assessment of need that will only continue to grow. These numbers also demonstrate a large construction workload, and this endeavor would allow the solicitation process to be as expeditious as possible eliminating the need to utilize FAR Part 14 and 15 open market procedures for most construction requirements. An expedited solicitation process would assist greatly in processing the construction projects and ultimately improving care settings and the environment for Veterans served in these geographic areas.

B. Applicable Statutes/ Regulations

In accordance with (IAW) the definition provided at FAR 2.101, “Consolidation or consolidated requirement” means a “solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy … requirements of the Federal agency for construction projects to be performed at two or more discrete sites.”

While FAR 7.107-2(a) recognizes that consolidating requirements may provide substantial benefits to the Government, further account is given to the potential negative impact upon small business participation. Accordingly, before actions are taken by an agency to consolidate requirements under a subsequent solicitation and/or contract award, accompanied by an estimated total dollar value exceeding $2 million, a written determination is required. In accordance with FAR 7.107-2(a), the senior procurement executive or chief acquisition officer shall make a written determination that the consolidation is necessary and justified for actions exceeding $2 million.

VAAM M807-C Page C-4

III. CONSOLIDATION

A. Benefits

In order to be determined necessary and justified, the benefits of the consolidated acquisition must substantially exceed the benefits that would be derived from alternative contracting approaches that involve a lesser degree of consolidation.

Such benefits may include quantifiable cost savings or price reductions well as other benefits, regardless of whether quantifiable in dollar amounts, to include quality improvements that will save time or improve or enhance performance or efficiency, reduction in acquisition cycle time, better terms and conditions, or any other benefit.

The expected benefits of the consolidated acquisition will be discussed in the paragraphs below.

According to FAR 7.107-2(c), benefits other than cost savings or price reduction may also be used to justify consolidation. These benefits include: 1) Quality improvements that will save time or improve or enhance performance or efficiency;

(2) Reduction in acquisition cycle times; (3) Better terms and conditions; or (4) Any other benefit. The consolidation of construction services efforts between all of the stations will clearly achieve benefits (1), (2), and (3) as described in subparagraphs below:

VAAM M807-C Page C-5

(1) Creating one VISN 8 Florida/South Georgia VAHCS construction services MATOC for recurring needs will reduce duplicative efforts, save time and money, provide flexibility to the VISN 8 facilities, and protect the Government’s interests.

The MATOC will establish a pool of highly capable SDVOSB firms with standardized ordering procedures. This will streamline construction acquisitions and increase the Government's ability to obtain quality construction services in the most efficient manner as there is less risk of low-quality performance. The familiarity with the IDIQ holders and the consistent proposal submissions could reduce the evaluation time.

(2) Significant reductions in acquisition cycle times are expected to be achieved through consolidation. The standard VHA Procurement Action Lead Time (PALT) for design-bid-build acquisitions under $7M is 120 days and acquisitions $7M to $50M is 180 days respectively. However, with the Construction MATOC in place, the PALT is reduced by 50% to 60-90 days for each task order. The pre-solicitation time will be greatly reduced due to not having to do full blown market research and complete an acquisition plan.

(3) The terms and conditions will be established by written agreement of the parties in the resultant MATOC contracts and will apply to future task orders between the parties during the five-year ordering period. This should result in increased administrative efficiencies and cost savings with the use of the MATOC.

(4) Under this contract type, contractors may a greater likelihood of receiving a higher quantity of work over an extended period. The increase in job security, paired with the higher expected volume of projects provided by the MATOC, may incentivize contractors to provide the Government more competitive pricing. If contractors receive multiple awards at the various locations, it may incentivize them to provide more competitive pricing because they are already mobilized on these sites.

B. Mission Success

The approval authority may also determine that consolidation is necessary and justified when the benefit thresholds are not met, but the contract is critical to the VA mission success and the procurement strategy provides for maximum practicable participation by SDVOSBs.

Veteran’s Health Administration’s (VHA’s) current owned infrastructure is aged, deteriorating, and does not meet modern healthcare requirements. Additionally, the growth of projected space need has outpaced VA’s execution capability. Without addressing both problems, VA is at risk of systemic failure. The risk is being realized now with costly and repeated repairs to several aging facilities. VHA must act now to avert an increasing risk for potentially catastrophic critical infrastructure failures. VA

VAAM M807-C Page C-6 has developed a long-term capital investment strategy to modernize and optimize healthcare infrastructure.

VHA must ramp up its ability to execute construction projects in VISN 8 Florida/South Georgia VAHCS. VHA is planning for an increase in NRM and Minor construction funds over the next five years. Currently, there is not a VISN 8 MATOC for construction to support the VISN facilities. An IDIQ MATOC for construction that enables VHA to acquire construction services from vetted SDVOSB construction firms using a streamlined acquisition process supports the mission essential goal of modernizing Veteran healthcare facilities.

The use of a consolidated MATOC for construction projects is critical to the mission success of each VAMC. Without a construction services MATOC in place to provide streamlined project execution, increased times for projects would occur and result in delays in facility renovations and operations. These delays would jeopardize the effectiveness of these hospitals in serving the Veterans and could ultimately result in mission failure. Therefore, the MATOC is critical to the agency’s mission success.

As demonstrated here, while the anticipated financial benefits do not meet the thresholds in FAR 7.107-2(d)(1), the expected benefits not quantifiable in dollar amounts are critical to the agency's mission success and this procurement strategy provides for maximum practicable participation by small business, particularly SDVOSBs.

C. Procurement Strategy

The MATOC is not intended to replace IDIQ contracts for construction services which are currently available within PCAC or Network Contracting Offices’ (NCOs) 8, or to preclude NCO 8 from establishing their own vehicle. The ordering period will be five (5) years from the date of award. The maximum overall contract value for the life of this IDIQ MATOC is . The maximum of will apply collectively to all awarded IDIQs and all IDIQ holders will collectively share in the maximum contract value. Therefore the maximum contract value for this IDIQ is

It has been determined that a firm-fixed-price (FFP) MATOC is appropriate, and each subsequent task order will be FFP. There will be no options on the IDIQs. The MATOC competition will be sought via a request for proposal announced on Contract Opportunities via SAM.gov.

As there is ample competition at the SDVOSB level, the acquisition will be set-aside for SDVOSBs with awards being made following construction procedures set forth in FAR 36, VAAR 836, and VA Acquisition Manual (VAAM) M836.

D. Alternative Approaches

VAAM M807-C Page C-7

The following are alternative consolidation approaches that would involve a lesser degree of consolidation, but they are not as beneficial as the VISN-wide IDIQ

MATOC:

(1) Take No Action and Continue Issuing Single Award Type “C” Contracts:

This is a lesser degree of consolidation because it does not consolidate any actions if they are done as stand-alone awards. However, taking no action does not support PCAC with expediting the procurement of the budgeted workload for construction services in VISN 8 Mainland. PCAC is currently procuring each VISN 8 construction requirement open market utilizing FAR Part 14 or 15 procedures. Although this approach is “feasible” it is not advantageous to the Government as both procedures require more Government resources and reviews and result in an overall increased PALT which ultimately impacts mission needs as projects take longer to procure and less contracts can be awarded. As noted above, “C” type contracts for construction take approximately 120-180 days to award versus 60-90 days to award a task order. Continuing to take “no action” will continue to compromise efficiencies gained using an IDIQ vs a “C” type contract, resulting in fewer construction awards directly affecting the VA’s mission. NRM funding is typically one-year money, which means it expires at the end of each Fiscal Year if not obligated. Any acceleration in PALT is important when trying to make annual obligations.

(2) IDIQ MATOC per VISN 8 Mainland VAMC: An IDIQ MATOC for each of the VAMC’s within the VISN 8 Mainland locations would be a lesser degree of consolidation because there would be no consolidation; all projects are at one facility. This is a feasible alternative, but not advantageous to the Government.

All VISN 8 Mainland locations frequently procure almost-identical construction requirements using the same pool of SDVOSBs; therefore, acquiring these requirements through separate MATOCs substantially duplicates efforts, and becomes inefficient and administratively burdensome. An IDIQ MATOC per facility would create approximately eight times the amount of administration as there are eight Joint Commission-accredited VA medical centers in this geographic area which is a significant duplication of effort when this can be accomplished through one solicitation with multiple awards for all VISN 8 mainland requirements instead of eight solicitations with multiple awards for each of the eight facilities.

(3) IDIQ MATOC for North Florida and South Florida: An IDIQ MATOC for North Florida covering four (4) facilities and an IDIQ MATOC for South Florida covering four (4) facilities would be a lesser degree of consolidation. This is a feasible alternative, but not advantageous to the Government. All VISN 8 Mainland locations frequently procure almost-identical construction requirements using the same pool of SDVOSBs; therefore, acquiring these requirements through two separate Mainland IDIQ MATOCs by essentially cutting the state in half, VAAM M807-C Page C-9

(4) Off-ramping Procedures: Off-ramping procedures will be included but limited to removing IDIQ holders that no longer eligible for task order awards. Scenarios may include SDVOSBs that are no longer registered in SBA’s VetCert database, Joint Ventures that have expired agreements, changes to the business entity on contract, etc. The business status of each IDIQ holder will be evaluated at least annually to determine if off-ramping procedures are applicable.

In summary, the proposed MATOC is critical to the agency’s mission success as discussed above and will potentially offer efficiencies to the Government. Based on the information presented above, these efficiencies will be balanced with support for SDVOSBs. At least SDVOSB firms were found capable during market research, and it is anticipated to award at least that many IDIQ contracts. It is acknowledged that there may be some minimal impact; however, measures such as on-ramping, lack of exclusivity, and transparency will assist in mitigating any potential negative impacts throughout the life of the contract.

F. Inclusion of small business concerns

IAW VAAR 819.201, it is VA policy that small business concerns owned and controlled by Veterans shall have maximum practicable opportunity to participate in VA acquisitions, consistent with efficient contract performance and the priorities and preferences established under 38 U.S.C. 8127 and 8128. Additionally, within the VA hierarchy of small business program preferences established by 38 U.S.C. 8127(i) (see VAAR subpart 819.70), VA must consider preferences for certified SDVOSBs first. Market Research conducted supports the 100% SDVOSB set-aside.

Additionally, there will be subcontracting opportunities in each location for other small businesses and SDVOSBs to be utilized.

This Determination and Findings has been coordinated with the Office of Small Disadvantaged Business Utilization for the VHA, as evidenced by the signature block on the last page of this document.

DETERMINATION

Based on the above, I hereby determine that in accordance with FAR 7.107-2(e) that consolidation is necessary and justified.

Attachments:

1. VHA Procurement PALT Standards

2. Market Research Report

VAAM M807-C Page C-10

PREPARED BY: I hereby certify that the supporting information and data used to complete this determination is accurate and complete to the best of my knowledge and belief.

REVIEWED BY: I have reviewed this determination and find it to be accurate and complete to the best of my knowledge and belief.

Concur:

VAAM M807-C Page C-11

Concur:

Approve: